AUD/USD Weekly Overview for June 17-21

The AUD/USD changed direction and rallied last week and traded around the 0.94-0.96 range. This recent recovery might have been partly driven by the rally of the Euro/USD and partly as a correction to the previous week’s fall. This week several new items could affect the Aussie dollar. These items include: FOMC meeting, U.S CPI, U.S housing starts, Euro Group meetings, RBA minutes of recent meeting, sand U.S. jobless claims.

 Here is a short overview for the Euro/USD currency pair for June 17-21  

Forex Market June Update:

The Aussie dollar to USD rose by 0.77% during last week and reach by Friday 0.957; during the month (up to date), the AUD /USD remained virtually unchanged.

Correlations among Currencies– June Update

The table below shows the changes in the linear correlation (moving correlation) between the AUD/USD and other leading currencies pairs during May and June (daily percent changes).

AUD USD Linear Correlation Currencies Pairs For May-June 2013 June 17As seen, the strong correlations among the AUD/USD and Euro/USD suggest that the Euro/USD will affect the direction and the Aussie dollar during the week.

To see the weekly review about gold and silver markets see here.

Aussie/USD Overview for the weekly news (the full weekly market overview is herein)

Monday, June 17th

  • 00:30 – Minutes of Reserve Bank of Australia’s Policy Meeting: The minutes of the recent monetary policy meeting of the Reserve Bank of Australia may offer some insight behind the decision of board to maintain the rate unchanged at 2.75%; the minutes of this meeting may affect the Aussie dollar;

Tuesday, June 18th

  • 13:30 – U.S. Housing Starts: in the previous monthly report, the adjusted annual rate reached 853,000 in April 2013, which was 16.5% below March’s rate;
  • 13:30 – U.S Core Consumer Price Index: According to the U.S Bureau of Labor statistics, during April, the CPI declined by 0.4%; the core CPI edged up by 0.1%; the core index rose over the past twelve months by 1.7%.

Wednesday, June 19th

  • 19:00 – FOMC Meeting and Press Conference: In the previous of meeting the FOMC left its policy unchanged. Moreover, Bernanke’s testimony didn’t offer any big headlines, even though he did suggest that tapering the current asset purchase program isn’t off the table and could happen in the near future. Considering the inflation is still very low, the unemployment is still well above the Fed’s goal of 6.5% and economic growth isn’t stable, I suspect the Fed won’t change its policy this time. Over the weekend the IMF criticized the U.S for expanding its budget to promote growth. This is another consideration that might keep the Fed’s current QE3 policy unchanged. The Fed’s forecast, however, could change, which, in turn, could influence traders and investors. If The Fed will implement any changes to its policy or change its forecast, these changes could stir up the markets; how will the Fed’s upcoming decision affect precious metals rates see here.

Thursday, June 20th

  • 13:30 – U.S. Jobless Claims:  in the previous report the jobless claims declined by 12k to reach 334k; the next weekly report may affect the U.S dollar and consequently commodities and equities markets;

Aussie dollar to USD Weekly Outlook

The FOMC meeting could stir up the forex market including the AUD/USD. If the Fed will taper its current asset purchase program or even hint to that effect, we are likely to see a sharp drop in the AUD/USD as the US dollar will rally. Otherwise, don’t expect much movement form the AUD /USD currency pair as it will continue to slowly rise.

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